Verizon scores strong Q4; adds 1.7M new customers

Verizon scores strong Q4; adds 1.7M new customers

Summary: The U.S. largest cellular giant by subscribers added 1.7 million retail cellular net connections, despite increasing competition pressure from T-Mobile.

SHARE:
TOPICS: Verizon, Networking
6

Verizon reported fiscal fourth quarter earnings, beating analyst expectations.

vz

The largest U.S. cellular network by subscribers reported fourth quarter profit of $5.07 billion on revenue of $31.07 billion. Non-GAAP earnings per share stood at 66 cents, up 73 percent year-over-year (statement).

Verizon's net income for the fourth quarter was $7.92 billion, but $2.85 billion goes to Vodafone for its 45 percent stake in Verizon Wireless. Verizon has bought out Vodafone's stake and the deal should close shortly. When that deal closes, Verizon's accounting quirks will go away.

Wall Street was looking for 65 cents per share on revenue of $31.02 billion. 

For the full year, Verizon reported non-GAAP earnings per share of $2.48, an increase of one-quarter year-over-year.

The company, which in the year-ago quarter suffered a financial blip as a result of Hurricane Sandy, recovered more than 14 months after the storm battered the U.S. east coast, taking down vital infrastructure in major metropolitan areas including New York City. The cellular and landline giant posted a $1.93 billion loss in part as a result of the superstorm.

Verizon chairman and chief executive Lowell McAdam said in prepared remarks that the company returned almost 19 percent back to its shareholders during the year while improving its financial performance.

slide1
(Image: Verizon)

Across the company's entire business, from wireless to fiber broadband and enterprise services, Verizon saw a 4.1 percent year-over-year increase in its full-year 2013 operating revenues, totaling $120.6 billion.

For Verizon Wireless, the company's bread and butter, revenues were up 5.7 percent year-over-year in the fourth quarter — despite increasing pressure from rivals, notably T-Mobile — to $21.1 billion.

By the numbers:

  • With 1.7 million new retail cellular net connections, Verizon now has 102.8 million cellular users.
  • Adding 625,000 new tablet users, Verizon's total tablet base now stands at 3.6 million customers
  • 87 percent of all devices activated were phones; 8.8 million smartphones activated during the fourth quarter
  • A total of 69 percent of all data traffic currently flows through the company's 4G LTE network
  • Verizon saw a 2.3 percent growth in its data center, cloud, and security enterprise unit
Screen Shot 2014-01-21 at 8.07.39 AM
(Image: Verizon)

Pacific Crest analyst Michael Bowen warned in a Monday research note on the growing threat from T-Mobile, whose chief executive appears hellbent on not least shaking up but also "transforming" the wireless industry:

While T-Mobile has begun to affect both AT&T and Sprint's results, as exhibited in our recent survey work, Verizon's wireless porting ratios have not been affected materially yet as T-Mobile has been extracting more subscriber defections from Sprint and AT&T. However, we do not believe that Verizon will remain completely untouched by T-Mobile's likely successes in adding subscribers during 2014.

For the fourth quarter in fiber internet (FiOS), Verizon added 126,000 net new customers and 92,000 net new video connections, totaling 11.4 high-speed customers. The company also said it has been investing in replacing high-maintenance portions of its home copper network with fiber optics to provide better services and to reduce ongoing repair costs. 

In its enterprise division, the newly-named Verizon Enterprise Solutions is continuing to increase and constitute a larger percentage of the company's overall revenue base.

Looking ahead to the first quarter of 2014, Wall Street expects earnings of 86 cents a share on revenue of $30.8 billion.

Corrected at 10:35 a.m. ETwith Vodafone amendments.

Topics: Verizon, Networking

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

6 comments
Log in or register to join the discussion
  • 1.7 "new" customers, or additional "new" devices on current plans?

    We got department stores, and toilet paper
    got Styrofoam boxes for the ozone layer
    Got a CEO who says "buy, buy, buy!"
    "We got lots of devices, and you need at least five!"
    William.Farrel
  • T-Mobile is a joke in the US

    Seriously, there needs to be more competition amongst the cellular providers. The only providers that someone interested in getting service will consider: Verizon Wireless, ATT, and Sprint. And depending on what part of the US you live in, many times only 1 or 2 of those are legitimate choices.
    ejhonda
    • depends on your point of view

      I've never considered verizon due to cost of service and customer service horror stories. I've had t-mobile for 10-ish years and have always been very satisfied with them. T-Mobile has always been the most for my money. Right now I have 4 lines with unlimited everything for 126 a month (that's how much I pay after fees and taxes). What are you paying on verizon?
      copracr
  • Too bad Verizon treats its customers like morons

    My Samsung GS3 recently died under warranty. Because there was a nick (Verizon said 'gouge') on the case that had been there for months, it would - at its sole discretion - either repair for nothing OR bill me Verizon's full retail price for a replacement. Once I gave them my phone I would have no further say in the matter. What incentive would Verizon have to repair my phone?

    So I instead turned to Samsung where my phone would be evaluated and if Samsung felt my nick invalidated the warranty, they would contact me and repair/return at my direction. This is ALL I asked for from Verizon and they refused. Needless to say, Samsung repaired the phone at no charge because the nick was only cosmetic.

    Orchids to Samsung, onions to Verizon .... after 20 years as a customer (with 5 lines for the past several years), needless to say I will likely switch vendors after fulfilling my current contract.
    Jim Johnson
    • Green shift

      While I have no particular love for Verizon, I do note that they added 126,000 net new customers in three months. It is unlikely that these people only recently wandered out of the forest needing mobile devices for the first time. No, it is far more likely that they migrated from one of The Other Guys, for reasons not unlike yours.

      Science has shown that the farther you are away from the other vendors, the greener the grass looks on their side of the fence.
      Robert Hahn
  • nothing like a market place to sort out winners and losers

    in the meantime the US Post Office loses a billion dollars and can't perform a simple task like forwarding mail
    wizardjr